DMO Targets N700bn Domestic Debt FGN Bonds

The federal government is set to deepen its domestic borrowing drive with plans to raise N700 billion from the bond market, as part of efforts to finance budgetary obligations and manage the country’s rising public debt profile.

The offer circular issued by the Debt Management Office (DMO) to Primary Dealer Market Makers (PDMMs) show that the auction, scheduled for today Monday, April 27, 2026, will comprise a mix of medium to long-term instruments through re-openings of existing bonds.

A breakdown of the bond issuance indicates that N300 billion will be raised from the 17.945 per cent FGN AUG 2030 bond, a five-year re-opening, while N100 billion is expected from the 17.95 per cent FGN JUN 2032 instrument with a seven-year tenor. The balance of N300 billion will be sourced from the 22.60 per cent FGN JAN 2035 bond, a 10-year re-opening.

The planned issuance underscores the government’s continued reliance on the domestic debt market to plug fiscal gaps, amid constrained revenues and persistent expenditure pressures.

Under the terms of the offer, successful bidders are to pay a price aligned with the yield-to-maturity that clears the auction, in addition to any accrued interest on the instruments.

The bonds are priced at N1,000 per unit, with a minimum subscription of N50.001 million and subsequent investments required in multiples of N1,000.

Interest payments will be made on a semi-annual basis, while the principal will be repaid in full at maturity, providing investors with predictable income streams over the life of the instruments.

Analysts note that the relatively high coupon rates on the longer-tenor bonds reflect prevailing market conditions and investor expectations around inflation and interest rate dynamics, even as the government seeks to balance cost and risk in its debt strategy.